is there any decent way to trade commodities..

[Rohit1]

hello all,

I am new to this board and even new to trading fundas.... can anyone help me with trading commodities and how to develop any strategies there.

thanx alot

Rohit.

 

[gooseman]

i'd love to help. buy low and sell high mate-that's the key.

 

[Hoggums]

Buy as many barrels of oil as you can afford and take delivery. Bury them in your back garden and dig them up in 30 years, sell them for a nice tidy profit.

 

[rathcoole_exile]

never like to argue with gooseman, but i like to buy high, close higher and sell low, close lower

good luck, hope it helps

 

[london88]

hello all,

I am new to this board and even new to trading fundas.... can anyone help me with trading commodities and how to develop any strategies there.

thanx alot

Rohit.

Hi Rohit, I am going through the same steps as you. I am interested and fascinated with commodities and the best way to go about it is to read and watch the market.

Read about futures and options and forwards and understand their implications for risk, leverage, delivery, sale etc... Look at the months on each of the commodities

January F July N
February G August Q
March H September U
April J October V
May K November X
June M December Z

these are for physical delivery.

Choose the commodities you want to trade there are hundreds and each have particual characteristcs affecting their price and volatility. Look at precious and base metals, softs, oil etc... Try and be specific and learn about one or two correlated commodities to begin with and then expand in the future. As for strategy the best thing to do is educate yourself, jot down a trading plan and move to a demo account or CFD provider and play with that. As you become more knowledgeable the steps will be more obvious.

Here are a few links to start you off

How to Trade Commodities ezine
Commodity Profiles
Futures contract - Wikipedia, the free encyclopedia

There are a couple of good books you can get your hands on but I suggest you read these and get a better idea.

 

[Rohit1]

thabx for the help..

I have already done these basics and following base metals but they are highly volatile ... I am doing trade in Multi Commodity exchange India.. following commodities such as Zinc, Lead, Aluminium & Nickel.
There was some correlation in Lead and Zinc but that didn1t helped... and resulted in some decent amount of losses.
looking into futures and planning to go for Calendar Spreads do u have any idea bout that.

Regards,
Rohit

Hi Rohit, I am going through the same steps as you. I am interested and fascinated with commodities and the best way to go about it is to read and watch the market.

Read about futures and options and forwards and understand their implications for risk, leverage, delivery, sale etc... Look at the months on each of the commodities

January F July N
February G August Q
March H September U
April J October V
May K November X
June M December Z

these are for physical delivery.

Choose the commodities you want to trade there are hundreds and each have particual characteristcs affecting their price and volatility. Look at precious and base metals, softs, oil etc... Try and be specific and learn about one or two correlated commodities to begin with and then expand in the future. As for strategy the best thing to do is educate yourself, jot down a trading plan and move to a demo account or CFD provider and play with that. As you become more knowledgeable the steps will be more obvious.

Here are a few links to start you off

How to Trade Commodities ezine
Commodity Profiles
Futures contract - Wikipedia, the free encyclopedia

There are a couple of good books you can get your hands on but I suggest you read these and get a better idea.

 

[Rohit1]

thanx for the help..

but when every day new high and lows are made then tooo when u are very new to trading it kills mate and makes trading much more difficult.

i'd love to help. buy low and sell high mate-that's the key.

 

[london88]

I understand the general principle of calendar spreads but have limited knowledge and experience.

 

[TickerHeads]

If you are new to trading, then I wouldn't start off with commodities. You'll just blow your account up. Learn to trade stocks or even forex first. Most of the same principles apply regardless of what you are trading. You just want to get experience executing in a live market.

 

[£10kLoser]

The basic commodities like gold and oil are no more likely to 'blow your account up' than Forex or stocks. You can trade them in the same way with sensible stops. Certainly more people have lost money trading Forex than oil and gold. But then pretty much everyone trades Forex because that's what's punted at the moment.

If you want to trade commodities, stay away from the less popular ones because they can move in strange ways to say the least.

 

[tradinginthepit]

Free Commodity Trading Resources

hello all,

I am new to this board and even new to trading fundas.... can anyone help me with trading commodities and how to develop any strategies there.

thanx alot

Rohit.

Hi,

I would suggest the following sites which provide a daily commentary and update on the main commodities - these are updated daily and provide suggested tips and trading strategies based on technical analysis and using candlesticks, moving averages and support and resistance levels. The reason I like them so much is that each site concentrates on just one commodity, so the oil site is just about oil, and the gold on gold etc - all the sites have free live charts, live news, economic calendar, video updates three times a day and much more - hope you enjoy them and good luck with your trading - Daily Oil Prices, Spot Gold Prices, Spot Silver.

 

[london88]

Thanks for the site links

 

[tradinginthepit]

Learn The Markets First

hello all,

I am new to this board and even new to trading fundas.... can anyone help me with trading commodities and how to develop any strategies there.

thanx alot

Rohit.

First you need to understand each market in detail - trading in commodities is very different as these are real products which have real uses, and the prices are therefore influenced by the supply and demand of each market. If you take gold as an example, one of the peculiarities is that the physical amount never falls, as very little is ever consumed, so the stockpile of gold simply grows, year on year, with the stockpile simply traded from one owner to another. Unlike gold, silver is no longer classified as a precious metal, but as an industrial metal, and is therefore consumed, and having industrial applications its price has a close correlation to the economic climate. These are the issues you will need to understand before trading any commodity whether a hard, or soft. Oil is another which has its own rules, with OPEC manipulating supply and demand. An excellent free resource which is updated daily are run by a lady who trades commodities - each site concentrates on just one commodity so they provide an excellent learning resource - both technical and fundamental - oil prices, spot silver, spot gold prices. Hope you find these useful and good luck

 

[new_trader]

First you need to understand each market in detail - trading in commodities is very different as these are real products which have real uses, and the prices are therefore influenced by the supply and demand of each market.

Interesting. But how does this make them different to trading other instruments? Are they not influenced by supply and demand? Maybe not...from what I read they are influenced by pretty coloured lines and magic formulas.